On the 58th Republic Day of India, I extend my greetings and good wishes to all my compatriots and to the Government and the people of our friendly neighbour, the Democratic Socialist Republic of Sri Lanka.

The last 57 years have seen India mature socially, economically and politically. What used to be described as India's democratic "experiment" is now looked on by the world with a sense of wonder. India's pluralistic, secular polity has weathered every challenge in the last 57 years. Its democratic institutions have emerged more robust, more inclusive and more responsive to the needs of our people.

The Indian economy is today registering the fastest growth in our history, exceeding 8% for the last three successive years. And the growth is accelerating. For March-December 2006 the economy grew at well over 9 %. India is well on track to achieving double digit sustained growth as envisioned by Prime Minister Manmohan Singh.

While the Government is committed to doing everything to consolidate the rate of growth, there has also been a conscious effort to make the growth process more inclusive. We are introducing programmes to directly benefit people and sectors of the economy which have not fully benefitted from the growth momentum so far. There has been a special thrust to empower the less privileged sections of society and minorities and those living in conditions of extreme poverty. Between 1993 and 2004, the percentage of population living in poverty has declined from 36% to 28% and in the last three years the reduction of poverty is estimated to have been ever faster. In absolute terms this implies that over a 100 million people have been pulled out of the clutches of poverty.
Our economic growth does not make us complacent. The Prime Minister has articulated five challenges that will engage us over the next decade, both as a prerequisite for fast growth and as a consequence of it. These are: (i) revitalisation of the rural economy; (ii) improved delivery of essential public services; (iii) improved management of our urban areas; (iv) preparing our financial system for increased global integration; (v) establishing a regulatory culture to facilitate cost-effective private investment in infrastructure.

Over this same period of high growth, India has also been rapidly integrating with the global economy. While globalisation has created a wealth of new opportunities, it has also thrown up major challenges, particularly for those sections that tend to get marginalized. It is here that regional cooperation has a major role to play, to benefit from global impulses in a collective and measured manner while minimizing its negative consequences. India therefore intends to pay particular attention to regional economic cooperation.

A Comprehensive Economic Cooperation Agreement with Singapore became operational in 2005. We are currently negotiating an FTA with ASEAN which is likely to be finalized by July this year. India's participation in the East Asia Summit held recently at Cebu in Philippines reflects our growing bonds with our extended neighbourhood in the East. An observer status in the Shanghai Cooperation Organization is cementing our relations with our extended neighbourhood in the North.

In our immediate neighbourhood, we are engaged in the process of moving towards a closer knit SAARC region. Our countries are bound by age-old ties of history and culture. We need to complement this by forging a dynamic economic partnership. Prime Minister Manmohan Singh has said, "we have an opportunity to reclaim our legacy of interconnectedness to restore the natural exchange of goods, people and ideas that has characterized our shared South Asian space". That summarizes India's vision for the South Asian Region.

The forthcoming Fourteenth SAARC Summit to be held in New Delhi in April, 2007 provides a great opportunity to the process forward in concrete directions. We look forward to Sri Lanka's wholehearted and positive contribution.

In order to re-envigorate the SAARC process, we have to make the South Asia Free Trade Agreement (SAFTA)truly effective. SAFTA serves as an incentive to our neighbours to link up with the robust Indian economic growth engine, to our collective and mutual benefit.

Within SAARC, our relationship with Sri Lanka has been very special. Sri Lanka has become India's largest trading partner in SAARC region. Bilateral trade, which was stagnating at US$ 500 million in the late 90s, crossed the US $ 2.2 billion mark in 2006. The six year old Free Trade Agreement has worked well for both countries. It has vastly enhanced trade volumes, and also reduced the ratio of India's exports to Sri Lanka's exports significantly. India is the largest source of imports and the third largest export destination for Sri Lanka. The Comprehensive Economic Partnership Agreement, which is currently being negotiated, is expected to sustain and build on the momentum generated by the FTA and take the two economies beyond trade in goods towards greater economic integration and enhanced interaction in areas like services and investment.

India attaches the highest importance to its relations with Sri Lanka. The strength of our bilateral relationship lies in the bonds of friendship of over two millennia between the peoples of the two countries. The political leadership continues to nurture this friendship through sustained interaction and sharing of views on developments in our respective countries and in the world at large. The exchange of several high-level visits over the past few months, in particular that of H.E. President Mahinda Rajapaksa to India in November 2006, provided an important opportunity for continuing exchange of views, and strengthening bilateral cooperation.

As a close friend of Sri Lanka we have an abiding interest in peace, stability and development in this country so that it is able to harness the fruits of development taking place in our region and beyond.

We are committed to the unity, sovereignty and territorial integrity of Sri Lanka. Our firm belief is that the ethnic issue in Sri Lanka has to be resolved through a negotiated political settlement acceptable to all sections of the Sri Lankan society and consistent with the principles of democracy, pluralism and human rights.

Bilateral economic and commercial relations between India and Sri Lanka are multi-faceted. The wide swath of our economic engagement includes buoyant trade, investments, services, infrastructure development, technical training and extension of lines of credit.

It has been decided that NTPC, in a joint venture with CEB, will work on setting up a 500 MW coal based power plant in Trincomalee at an investment of $ 500 million. We are also discussing refurbishment of the southern railway corridor from Colombo to Matara under an Indian line of credit of US $ 100 million. The Indian participation in development of information and communication technology and oil and natural gas is also progressing.

Investments in India by Brandix, MAS and Ceylon Biscuits are positioning Sri Lankan companies to take advantage of the huge Indian market and as a base for their further outreach internationally. This trend of mutual investments, trade and economic partnership is a very positive development which needs to be encouraged and sustained.

Our greatest strengths in both Sri Lanka and India is our talented and hard working people. We should give them every advantage to succeed in the world of the 21st Century. It is of considerable significance therefore that the Mahatma Gandhi Scholarship Scheme was launched on October 2, 2006 in Sri Lanka; 100 Sri Lankan students were awarded these scholarships. In association with the Ministry of Education, Government of Sri Lanka, the students were selected from all the 25 districts of Sri Lanka on means-cum-merit basis. The selected scholars will receive financial assistance of Rs. 1500/- per month for a period of two years to enable them to pursue their 'A' level courses. A new set of 100 scholarships will be granted every year.
The High Commission of India also awards 75 scholarships to Sri Lankan nationals for pursuing under-graduate and post-graduate courses in various reputed institutes and universities in India. Indian Cultural Centre, Colombo awards nearly 12 scholarships to Sri Lankan students to follow under graduate courses in music, dance and fine arts.
India and Sri Lanka have had cultural links through the ages. This interaction has mutually enriched both our societies'. Common cultural impulses with India abound in all parts of Sri Lanka. I am glad therefore that our cultural cooperation has continued with a renewed vigour the last few months. Art India, an exhibition showcasing the works of art of 31 Indian artists, painters and sculptors, was jointly organized by the Lalit Kala Akademi of India and the Ministry of Cultural Affairs & National Heritage, Government of Sri Lanka in September 2006. A 10-member Kathak troupe headed by Pt. Jai Krishan Maharaj visited Sri Lanka also in September 2006 to participate in the National Literary Arts Festival of the Government of Sri Lanka. I am also glad that a 12-member Sri Lankan dance troupe participated in the Navratri dance festival organized by the Government of Gujarat in October 2006.

It is well recognized that there are obstacles today to the full attainment by Sri Lanka of her goals of peace, prosperity and equitable development for her people.India can be divorced neither from her strife nor her suffering. I would like to quote from our first Prime Minister, Pandit Jawaharlal Nehru's public speech in July 1939 in what was then Madras - "Any person who looks at the map can realize that it is not conceivable in any scheme of things for India and Ceylon to be cut away from each other." This basic fact of geography, history and culture is even more true today. We stand with Sri Lanka as she endevours to find a fair, just and equitable solution to her problems. As Sri Lanka's closest neighbour, we shall rejoice when peace, normalcy and development return to this most wondrously beautiful island.